Transcript of Press Conference, Blue Room, Parliament House
13 March 2014
Jamie Briggs: Well, good morning. It is a great pleasure to respond on behalf of the government to the draft Productivity Commission report into public infrastructure, which is being released today. It is a report which shows very clearly that the system that we've inherited, the new government has inherited from the Labor Party, is broken and in need of substantial reform. The Productivity Commission's draft report says that you could save at least a billion dollars if you put in place better procedures to plan, build, and govern infrastructure investment across Australia.
Already, the Coalition is putting in place reforms to start to address these issues. We've got a bill, which is stuck in the Senate because of the Labor Party, to reform Infrastructure Australia, which will help us to start address some of the issues identified by the Productivity Commission's draft report. We've already talked about the reintroduction of the Australian Building and Construction Commission, which the Productivity Commission's draft report makes the point that overwhelmingly has been called for by stakeholders. And we've already put in place a substantial investment, some $36 billion, in future years working with our state counterparts to build the infrastructure of the 21st century because we realise that investing in the production of infrastructure efficiently and effectively will grow our economy and will benefit road users and will benefit taxpayers' lives.
What the draft report does, in some 600 pages, is canvas a series of ideas and discussion points about how we can more effectively put in place infrastructure investment, getting better value for taxpayers' money. The draft report specifically points to the utter and complete failure of the government in implementing its National Broadband Network as an example of how you waste taxpayers' money effectively.
The NBN, as the PC draft report shows, is the best worst example of government's failure to put in place coherent infrastructure based on good cost benefit analysis and research, but rather based on political priorities. And I think you should read—it's important to look at box 2.1 on page 73 to see the extent of the failure of the government in this respect.
It is a report which is now in a draft form. It's out for discussion and the government thinks it's very important from here that people have a thorough discussion in the community. We expect to see the final report at the end of May, which will make a series of recommendations. At that point in time, we will, of course, respond on how we are going to implement to ensure the investments we've already committed, some $36 billion, are done in the most effective way so that the taxpayers get not only effective use of their money, but better roads and a stronger economy.
Journalist: Is the Abbott Government inclined to support the recommendation to have motorists pay for every kilometre they drive?
Jamie Briggs: Well, motorists do pay for every kilometre that they drive at the moment. You pay through registration charges at the state level, you pay through fuel taxes, and you pay in some cities through tolls. So there are user charges at the moment. There are a range of them. A small section talks about another way—where you could look at having the user charge by replacing in a revenue neutral way in the future, but it is a discussion point. I don't think it is the main thrust, and it's certainly not something the government will look to pursue, and it ultimately will be a matter for the state, because the states own and operate roads, the federal Government doesn't.
Journalist: The federal Government frequently claims that there was a $6 billion dividend from the Australian Building and Construction Commission. The Commission has found that—sorry, the PC has found that there's no such dividend, essentially. Is the government embarrassed having made these claims?
Jamie Briggs: Well, firstly, I won the sweep because I picked in my office that you would ask that question, James. If you look at the terms of reference of the review, it doesn't mention industrial relations in the terms of reference. This was not an inquiry into industrial relations, yet the PC thought it was an important enough issue to dedicate a chapter to it.
It says very clearly that a large amount of stakeholders, over a hundred submissions so far to the draft report, call for the reintroduction of the ABCC, and it says it will help improve the productivity in the industry. It also makes the point, and I think this is a really important point when it comes to this issue and it's one that gets lost, is that the construction industry is a varied industry and there are variations, not just in the industry itself, i.e., what are you building, who is the union that covers you, which is a very important point, but particularly which city are you working in? Now, if you're working in Perth or in Melbourne, undoubtedly there are higher costs because of the behaviour, particularly of the CFMEU. There is no doubt about that. It is impossible not to accept that the lawlessness which exists in the parts of the CFMEU in those two cities adds to the cost of building particularly.
This report was largely focused or is focused on investment in public infrastructure, and it says it does have an impact. We never argued it's the only factor, but it is a factor.
Journalist: Back on roads, it does recommend a pilot study for the pay-as-you-go system. Do you think that would be a good idea to inform future positions on charging?
Jamie Briggs: Well, it says that there should be a discussion because it's a draft report. It doesn't have final recommendations at this stage. But it says there should be a discussion on whether the states should run a pilot study, because it would have to be the states that run them. The point I made before that roads are owned and operated by the states, we contribute heavily to their upgrades and this government's contributing more than ever before to upgrade, but that would ultimately be a matter for states.
I don't think, and the government doesn't think, that is a high order priority. What is a high order priority is the fact that we are leaking the billion dollars at least a year on money which could be better utilised to upgrade our infrastructure and get better productive outcomes, which is the goal of the infrastructure Prime Minister.
Journalist: …Infrastructure Australia legislative changes the federal Government is planning to make to control and threaten the organisation's independence. Isn't that doing the opposite of what the Productivity Commission's recommending in terms of taking the politics out of choices for infrastructure?
Jamie Briggs: Well, that is a very good question. The criticisms are wrong because the criticisms I don't think are based on policies, but rather on politics. The Infrastructure Australia changes make a couple of important amendments to the current act. Currently, the infrastructure coordinator is appointed by the minister of the day, and the previous minister appointed the infrastructure coordinator, firstly in 2008 and secondly within weeks of the federal election in 2013.
What we are seeking to do is to give all of the board independence to appoint an Infrastructure Australia CEO separate from the government, separate from the government making that decision. I find it very difficult to understand how that is less independent. We are also giving the board and the Infrastructure Australia CEO more independence on conducting an audit, which is an election commitment, over the current state of our infrastructure across Australia and we're asking them to build, in conjunction with the states, a pipeline of infrastructure investments based on the best economic analysis we can get.
And then on that basis, with that information publicly available through Infrastructure Australia, we can make decisions in conjunction with the state governments on the best way to spend taxpayers' money or, in fact, indeed, encourage the private sector to be involved more often where they can be, like they are in WestConnex in Sydney and like they are in east western Melbourne, to get the road infrastructure investment that we need. If you look at the WestConnex project in Sydney, it's a project which is 20 years past when it should have been put in place, 20 years overdue for people travelling on Parramatta Road. Parramatta Road is, in effect, a country road servicing a city of four million people. It's not good enough in Australia and it means our economic performance is not good enough.
So our reforms to Infrastructure Australia do make it more independent. Mr Albanese is struggling to get over the fact that he no longer is the minister and he's looking for ways to remain relevant in the debate. The way to be relevant in the debate would be to heed what the draft PC report says, that the system is broken, and take a small step in helping us fix it.
Journalist: Is the government willing to concede that if it wants to embark on a new infrastructure programme and for Tony Abbott to become known as the infrastructure Prime Minister, it will, as the PC report says, have to borrow significantly more money and can't just rely on the private sector to do all the heavy lifting for it?
Jamie Briggs: Well, the PC makes the point that the private sector is not a silver bullet and I don't think we've suggested it is either, but I think it is an important point. But what we see at the moment is that there is significant private sector capital looking to be invested in public infrastructure. What we need to work with our state counterparts on is ensuring we've got projects in a pipeline which are available to the private sector to invest in, which deliver better outcomes.
And so we're seeing that with WestConnex and I think we'll see even better outcomes with WestConnex into the future. We've seen that with the East West project in Melbourne. And we'll keep talking with the states in the lead up to the budget and beyond other projects that we see opportunities to get even better outcomes for Australians and for motorists.
One point I should emphasise—one thing that is a really important part of this—is that these projects are taking too long. These projects are being delayed unnecessarily by regulation at the local, state and federal level and chapter 14 of the draft report talks about that and that is another area where the government is very focused on getting streamlined applications, streamlined approval processes to ensure things are not taking longer than they ought and, therefore, costing more than they ought to.
The lead times for these big projects are very, very long and that is a disincentive for a private sector investor looking at investing in these big projects.
Question: The Treasurer Joe Hockey has said very clearly he'd like to see mature infrastructure assets recycled, sold to the private sector to fund new projects. Would you like to see your counterpart to say they will take action and start selling state assets?
Jamie Briggs: Well look, I think where there is opportunity to use their balance sheets better and use the assets that they own better, which would get a better outcome for people—like Mike Baird has done with the courts recycling into WestConnex—we would like to encourage. We've been engaging in discussion with each of the states, some are more willing than others too look at it. Some have got more capacity than others to look at it.
If you look at Victoria and South Australia, they've already had large amounts of their public assets sold, or leased, so their capacity to do that is more restricted than what it is in some of the other states. But we think that the overwhelming message that we are getting from the community is that we need better infrastructure. And our economy needs to be more productive, and this is a key part of ensuring that we can be as productive and as capable as Australians we want to be.
Question: The Prime Minister today left open the possibility of negotiation on the paid parental leave scheme and said he'd like it to go through in its unamended form, but recognises the reality is that it may not be possible in either this Senate or the next Senate. Do you think the scheme is economically responsible? And would you like to see it amended to, let's say, set at a $100,000 limit?
Jamie Briggs: Which page is that on the draft report? Look, the paid parental leave scheme was an election commitment. It will help address the productivity challenge that we talked about as far as investing in infrastructure. We took it to the election as a clear commitment. We understand that when you take commitments to an election, unlike the Labor Party, that people then expect you to implement them after the election, and that's what we'll seek to do. And I absolutely 100 per cent support the Prime Minister and the government in pursuing that.
Question: Would you support the scheme?
Jamie Briggs: Well that's a matter for the relevant minister, as part of the processes of the parliament, but we've got a policy and we expect the parliament to respect the mandate we were given in September. Now, in the event that they don't, I'm sure that the government will do what it can to get its agenda through.
Question: Do you think it will make a significant difference to the policy outcome if that small change was made?
Jamie Briggs: Well, look, again, I'm not going to commentate on policy, I think the policy is a good policy which will lead to market activity, because it will encourage better outcomes for women returning to the workforce after they've had children. Now, that is something that as one of our major economic challenges we have is to ensure we've got a participation rate, which means we can continue to have a growing economy. Equally, I think small business is utterly disadvantaged when it comes to paid parental leave. Most women have access to paid parental leave in large businesses through their agreement; small businesses don't have the capacity to pay and to deal in that circumstance. So this is a very pro-small business policy, you know, I think would help benefit small businesses enormously if we can get it in place.
Question: Peter Costello and John Howard, your former boss, have all argued that Martin Parkinson should stay in his current role, that he's doing a good job. Do you have a view on that? Should the Treasury Secretary remain where he is?
Jamie Briggs: Well, that is a matter for people well above my pay grade, and I'll let those people make those decisions. When it comes to the public service, the people I deal with—Mike Mrdak and my department—are outstanding. They do an outstanding job. And we have got a broad agenda of ensuring Australia's got the best infrastructure it can have, and Mike Mrdak and his team work diligently every day for us to ensure that's the case.
Journalist: Is Ken Henry right when says that it's inevitable the GST will have to be raised?
Jamie Briggs: Well that's a matter that Ken Henry commented on, and I guess he can explain that. Ultimately, the GST is a state tax, and if the states want to argue for changes to the GST then they should do that. Thank you.